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Payment performance picked up in the fourth quarter of 2016, relative to the third quarter; year on year, however, performance deteriorated.

Prompt payments fell by 7.23 percentage points to 45.87 per cent, compared to the same period in 2015; against the third quarter, however, prompt payments inched up 3.69 percentage points.

Meanwhile, slow payments rose 7.85 percentage points from a year ago to 43.28 per cent in the final quarter of 2016. Compared to the third quarter, it fell 3.09 percentage points.

The weak performance in the final quarter of 2016 was, to a degree, unprecedented, since payment performance typically improves as a result of sales during the year-end festive season, said D&B Singapore's chief executive Audrey Chia.

She added that it is not all doom and gloom, given the slight improvements on a quarter-on-quarter basis. "This could be due to firms taking a more proactive stance in enforcing of payment terms and exercising greater control over cashflow planning."

Sectorally, the construction sector had the highest proportion of companies making slow payments for the fourth straight quarter, a result of bad debts within the heavy construction sub-sector. Some 47.97 per cent of the sector were slow in paying for transactions in the fourth quarter, 7.6 percentage points higher than the same period in 2015, though it improved by 2.85 per cent against the third quarter of 2016.

The retail sector ranked second in payment delays, from subdued growth among retailers in recent months; 46.69 per cent of companies made slow payment - a 6.05 percentage point deterioration from the previous year, but 2.66 percentage points better than for the previous quarter.

The food and beverage sub-sector recorded the highest proportion of slow payments, said the SCCB.

The wholesale sector's proportion of slow payments jumped the most, by 8.35 percentage points, compared to the previous year; this came largely from prolonged weakness in trading activities, in particular for oil, petroleum and petroleum products, said SCCB. Compared to the third quarter, it registered a 3.2 percentage point improvement.

Meanwhile, the services sector was hit by slower payments within the health services, consumer-facing personal services and recreational services sub-sectors. Slow payments rose 7.82 percentage points to account for 44.66 per cent of the sector, though this was 3.35 percentage points better than the third quarter.

The manufacturing sector was pulled down by a slowdown in the transport engineering and biomedical sub-sectors. The proportion of slow payments in the sector rose by 7.63 percentage points to 45.4 per cent compared to the fourth quarter of 2015. Against the previous quarter, it fell 1.8 percentage points.